Can a Postcard Furnish an SPD Solution?

According to an article from the November 15, 2010 issue of Deloitte’s Washington Bulletin (reported on BenefitsLink.com),
the Department of Labor (DOL) “recently reaffirmed its long-standing
position that ERISA plan administrators cannot satisfy their obligation
to “furnish” summary plan descriptions (SPDs) simply by making them
available to participants”. The DOL’s informal guidance was issued in
response to a question posed by the American Bar Association’s Joint
Committee on Employee Benefits earlier this year, according to the
report.

The specific question posed was
whether SPDs could be furnished by mailing a letter or postcard to all
participants to let them know a new SPD is available and they can obtain
a free copy by calling a telephone number and requesting one. The
question stipulates that all participants have access to a telephone.

Deloitte reported that DOL’s answer was:

ERISA section 104(b)(1) provides that
the plan administrator shall “furnish” an SPD automatically to each
participant within 90 days of receiving benefits and, generally, every 5
years thereafter. With respect to the furnishing of SPDs, the general
disclosure standards set forth in 29 C.F.R. § 2520.104b-1(b) require
that the plan administrator use measures reasonably calculated to ensure
actual receipt of the material by participants and beneficiaries. In
addition, regulation section 2520.104b-1(b) requires that the SPD must
be sent by a method or methods of delivery likely to result in full
distribution.

The Department has long held the view
that, where documents are required to be furnished to participants, it
is not acceptable merely to make the documents available in a location
frequented by participants. (See Preamble to regulation section
2520.104b-1(b)). Staff believes that the facts presented above are
analogous to posting required disclosure materials in a location
frequented by participants. Similar to posting an SPD, requiring
participants to affirmatively seek out an SPD by placing a phone call is
not a method likely to result in actual and full distribution of the
SPD.

The DOL went on to explain that
its rules relating to electronic distribution of SPDs and other plan
materials do not apply in this situation because the SPD is not being
distributed via electronic media.